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BC Liquor LawSat, 13 Apr 2019 19:02:59 +0000enhourly1https://wordpress.org/?v=4.9.10Williams v. Richard: Ontario Court of Appeal weighs in on Social Host Liabilityhttp://www.bcliquorlaw.com/williams-v-richard-ontario-court-of-appeal-weighs-in-on-social-host-liability/
Fri, 12 Apr 2019 17:45:20 +0000http://www.bcliquorlaw.com/?p=1174In late 2018 the Court of Appeal for Ontario released its reasons for judgment in Williams v. Richard, the latest in a series of court decisions grappling with the concept of social host liability in Canada. The decision can be read in full here. Williams was an appeal from a summary judgment motion where the court dismissed the plaintiff’s […]

]]>In late 2018 the Court of Appeal for Ontario released its reasons for judgment in Williams v. Richard, the latest in a series of court decisions grappling with the concept of social host liability in Canada. The decision can be read in full here. Williams was an appeal from a summary judgment motion where the court dismissed the plaintiff’s claim for damages arising from serious personal injuries following a single vehicle incident involving a drunk driver. At issue before both the motion judge and the Court of Appeal was the state of social host liability law in Canada.

As Alcohol & Advocacy has previously reported, the law with respect to social host liability in Canada has been uncertain for some time. In another recent decision out of Ontario, Wardak v. Froom, the court refused to determine at an early stage that a social host could not or did not owe its guests a duty of care to prevent them from driving drunk.

Williams, if it proceeds to trial, may establish precedent that firmly expands the legal liability of social hosts to include the actions of their intoxicated guests when they get behind the wheel. The facts in Williams are grim, creating a very real risk that bad facts may lead to bad law.

FACTS

Mark Williams and Jake Richard were co-workers, friends and neighbours. They regularly got together to drink beer after work. Mr. Richard lived with his mother 500 metres from the home Mr. Williams shared with his wife and three children. Mr. Williams and Mr. Richard drank beer at one or the other’s home three to four times per week. They drank heavily and regularly enough that they entered into a pact that if either of them were going to drive while intoxicated and children were involved, the other would call the police.

On the day in issue, Mr. Williams came over to Mr. Richard’s home late in the afternoon after the two men had finished work for the day. They drank in Mr. Richard’s garage for approximately three hours during which time Mr. Williams consumed approximately 15 cans of beer. There was no dispute in the evidence before the chambers judge that Mr. Williams was inebriated and that Mr. Richard knew that Mr. Williams was in no condition to drive.

During this time Mr. Williams’ children were at home in the care of a babysitter. When Mr. Williams decided to call it a night Mr. Richard was aware that Mr. Williams intended to drive the baby sitter home, and that his kids would be in the car with him. Mr. Richard threatened to call the police on his friend, but acknowledged that he did not believe that Mr. Williams took that threat seriously. There was some evidence that he received an assurance from Mr. Williams that he would not drive the babysitter home.

Beyond threatening to call the police, Mr. Richard did nothing further to stop Mr. Williams from driving while drunk. The Court of Appeal observed that, for example, he did not call Mr. Williams’ wife or the babysitter to alert them of the situation and he did not ask his mother (who was not drinking) to drive the babysitter home.

Shortly after Mr. Williams left, Mr. Richard decided to accompany his mother to a variety store to purchase cigarettes. While driving to the store, Mr. Richard noted that Mr. Williams’ personal vehicle was not in the driveway. When Mr. Richard arrived at the store where his mother intended to buy cigarettes, only at this point in time did he decided to call the police from a nearby pay phone to alert them about a drunk driver.

On their way home from shopping for cigarettes Mr. Richard and his mother came upon the scene of Mr. Williams’ accident. He had driven into the rear of a stationary tractor. He was killed as a result of the collision and his three children were seriously injured.

The plaintiff in the action is Mr. Williams’ wife, suing on behalf of her injured children. She asserts that both Mr. Richard and his mother owed a duty of care to her late husband to prevent him from drinking and driving.

LAW OF SOCIAL HOST LIABILITY

Generally speaking, the law in Canada is that individuals who host social occasions where alcohol is consumed will not be found liable if an intoxicated guest subsequently gets behind the wheel and injures another driver. This issue was settled in the seminal Supreme Court of Canada decision Childs v. Desmoreaux, which Alcohol & Advocacy summarized here.

However in the cases subsequent to Childs no clear formula emerged with respect to social host liability for other situations, such as injuries to guests themselves should they choose to drink and drive or third parties (e.g. passengers). Rather, the determination of whether such a duty of care exists has hinged on the host’s knowledge of a guest’s intoxication and future plans to engage in potentially dangerous activity (foreseeability), and if on the specific facts of the case “something more” exists to create a positive duty on the host’s behalf to act. The “something more” could be facts that suggest the host was inviting the guest to an inherently risky environment or facts that suggest a paternalistic relationship existed between the parties (a proximity analysis).

The Court of Appeal observed there are many different factual permutations that can transform a social gathering into an invitation to an inherent and obvious risk. The Court explained that these situations can be situated along a spectrum. On one end of the spectrum are “bring your own alcohol” parties where hosts provide minimal alcohol and the gathering is of a modest size. At the opposite end of the spectrum would be a “wild” house party attended by underage drinkers. This latter situation likely implicates the host in the creation of an inherently risky environment.

In Williams the Court of Appeal overturned the motion judge’s decision finding fault with the duty of care analysis. The Court observed that the motion judge failed to consider each of the three elements necessary to confirm that the social host failed to meet the duty of care:

A consideration of whether the injury was reasonably foreseeable;

Whether there was sufficient proximity such that there was a duty to act; and

If a prima facie duty of care had been established, whether it was negated by broader policy considerations.

The motion judge’s duty of care analysis, which was brief, did not follow this structure.

The Court of Appeal concluded that the facts of the case raised a genuine issue requiring a trial to determine whether Mr. Richard, as a social host, may have invited Mr. Williams into an inherently risky environment that he controlled and created, thereby creating a positive duty of care. Similarly, the court found that there was conflicting evidence with respect to Ms. Richard’s awareness of the pact between her son and Mr. Williams, her knowledge of their heavy drinking, and her knowledge that Mr. Williams intended to drive on the night in question. For these reasons the Court of Appeal determined there was a genuine issue requiring a trial to determine the question of proximity as it related to Ms. Richard.

CONCLUSION

The Supreme Court of Canada’s decision in Childs, which at least at the time seemed to close the door on social host liability, was at least part premised on the Court’s contrasting of how alcohol is served in commercial settings ( e.g. liquor licensing legislation, motive for profit and staff ability to monitor consumption) compared to social settings. Childs was decided in 2006 and the underlying car accident occurred in 1999. It has been over 20 years since Mr. Desormeaux left a house party and drove into oncoming traffic. As regular readers of Alcohol & Advocacy know, since that time the way Canadians consume alcohol has changed considerably.

In British Columbia for example liquor primary licences are now available for businesses outside of the traditional food and beverage industry such as art galleries and hair salons, and many meal delivery services now offer alcohol delivery as well. These and other welcome changes to British Columbia’s liquor laws have blurred some of the distinctions noted by the court in Childs that used to differentiate a commercial provider of alcohol from merely a social host.

The facts in Williams are no doubt extreme. Should the matter proceed to trial, the judge may be left with little choice but to conclude that both or either of Mr. Richard and his mother had a positive duty to stop Mr. Williams from driving, and that by failing to do so, they are liable in damages to his injured children. Whether or not you agree with such an outcome, the precedent could change the way Canadians host social gatherings where alcohol is involved.

Alcohol & Advocacy will be monitoring the situation closely.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

]]>Unfiltered Brewing defeated at Nova Scotia Court of Appealhttp://www.bcliquorlaw.com/unfiltered-brewing-defeated-at-nova-scotia-court-of-appeal/
Fri, 15 Feb 2019 19:57:15 +0000http://www.bcliquorlaw.com/?p=1166On February 13, 2019 the Nova Scotia Court of Appeal released its reasons in Unfiltered Brewing Incorporated v. Nova Scotia Liquor Corporation. Those reasons can be read in full here. The appeal was dismissed, with costs ordered payable by Unfiltered Brewing to the Attorney General of Nova Scotia. The trial judge’s reasons are summarized here. […]

]]>On February 13, 2019 the Nova Scotia Court of Appeal released its reasons in Unfiltered Brewing Incorporated v. Nova Scotia Liquor Corporation. Those reasons can be read in full here. The appeal was dismissed, with costs ordered payable by Unfiltered Brewing to the Attorney General of Nova Scotia. The trial judge’s reasons are summarized here.

In each of these cases a brewery (Unfiltered Brewing) a distiller (the now defunct Toronto Distillery) and a restaurant (The Poacher) challenged their respective provincial regulators in court over what they perceived to be unreasonable or unlawful treatment around liquor markups. At risk of oversimplification, the theme in each complaint was that the monopolies that the provinces of Ontario and Nova Scotia maintain over the wholesaling of alcohol are not fair, are not sufficiently supported by legislation, and are largely supported by “policies” that are not accountable or publicly accessible. Grave allegations indeed.

The Trilogy, which now includes two appellate level decisions, are decided along similar lines: the courts have concluded that the provinces are entitled to maintain a monopoly over liquor sales, and that the broad language of the respective Liquor Acts provide for liquor boards to treat alcohol as their commercial property and apply a “proprietary charge” to the same – regardless of what role they play in retailing it or warehousing it.

A similar, but successful argument was made by Steam Whistle Brewing in its lawsuit against the Alberta Gaming Commission. Significantly, that case turned on the Comeau doctrine which operates to prevent barriers to inter provincial trade. A summary of that lawsuit can be found here.

Yes – there is an awful lot of liquor related litigation going on in Canada.

Court of Appeal Analysis

After reviewing the relevant sections of the Liquor Control Act, the Regulations and NSLC policy, the Court in Unfiltered Brewing summarized the following principles:

the sale and distribution of liquor in the province can only be done through the NSLC;

the NSLC has the sole discretion to determine the manner in which liquor is sold and distributed in Nova Scotia;

the NSLC has determined that any liquor sold by a microbrewery such as Unfiltered shall be deemed to be purchased by Unfiltered from it;

the NSLC has the ability to set the prices for the sale of liquor at a microbrewery and the sale price can include a mark-up;

the only way that a microbrewery can operate to manufacture and sell liquor is through permits issued by the NSLC; and

as a condition of receiving a permit, the microbrewery has to agree to comply with the terms and conditions of the permit which include complying with the Act, the Regulations and NSLC policies.

This was the relevant backdrop against which the trial judge determined that the mark-up on beer sold at Unfiltered’s premises was a valid proprietary charge.

Justice Farrar concluded that Nova Scotia, like the other provinces, is entitled to enact schemes to manage the supply and demand for liquor within its borders. While certain components of the scheme involve licences and permits – and that Unfiltered was required to adhere to those quasi-contractual documents if it wished to manufacture and sell beer – that is not sufficient to undermine their legitimacy.

Looking to the Future

What the Trilogy makes clear is that while the manufactures and retailers of liquor in Canada may not agree with how their respective provincial regulators tax and restrict their activities – that does not make these administrative decisions unlawful. If substantive changes (progress?) in the way alcohol is going to be manufactured, taxed, and sold in Canada are going to be made, they are going to be made by politicians, not judges. This is not necessarily a bad thing.

Mr. Matthew Boswell, Interim Commissioner of the Competition Bureau, recently penned an open letter to the Attorney General of British Columbia, the Honourable David Eby, Q.C. wherein he encouraged Mr. Eby to “consider the principles of competition” in forthcoming changes to British Columbia’s liquor laws. That letter can be read here.

One of Mr. Boswell’s concerns is the current restriction in British Columbia that prevents hospitality licensees from buying their liquor products from private liquor retailers. The effect of this restriction is that businesses in the hospitality sector are limited to purchasing products from government-owned stores. This policy restricts competition at the distribution level, because private retailers are unable to compete with government-owned stores. It also restricts competition at the retail level, because bars, restaurants and hotels are unable to set themselves apart from their competitors by offering unique products sold only by private retailers.

Will British Columbia rise to meet Mr. Boswell’s challenge? Will provincial regulators in Ontario and Nova Scotia respond substantively to the concerns raised by the litigants in the Trilogy? Stay tuned to Alcohol & Advocacy to find out.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

]]>Charter Rights and Vancouver’s BarWatch Programhttp://www.bcliquorlaw.com/charter-rights-and-vancouvers-barwatch-program/
Mon, 11 Feb 2019 05:16:29 +0000http://www.bcliquorlaw.com/?p=1154In the recent British Columbia Supreme Court decision R. v. Roudiani, the accused was charged with aggravated assault arising from an incident near the intersection of Granville and Smithe Streets in Vancouver – the heart of the Granville Entertainment District. Mr. Roudiani was ultimately acquitted and those reasons can be read in full here. Mr. Roudiani […]

]]>In the recent British Columbia Supreme Court decision R. v. Roudiani, the accused was charged with aggravated assault arising from an incident near the intersection of Granville and Smithe Streets in Vancouver – the heart of the Granville Entertainment District. Mr. Roudiani was ultimately acquitted and those reasons can be read in full here. Mr. Roudiani was successfully defended by a friend of Alcohol & Advocacy – Mr. Joven Narwal.

Of interest to readers of Alcohol & Advocacy is the unreported decision of Mr. Justice N. Smith on a voir dire relating to the admissibility of BarWatch records at trial. Mr. Roudiani asserted that the use of this information gathered by the police during its investigation was a breach of his Charter right to be free from unreasonable search and seizure.

The incident occurred at a location close to a number of nightclubs and bars that participate in Vancouver’s BarWatch program. BarWatch operates by requiring that individuals who wish to enter a participating establishment have their photograph taken and identification cards scanned. That information is then temporarily stored in an electronic database. One purpose of the system is to match this information against a list of individuals who have been barred from entering participating establishments. By accessing the data at Studio Nightclub, police were able to compare the nightclub’s photograph of the accused with the alleged assailant shown on other surveillance video. Crucially, the BarWatch photograph of the accused was attached to his name – information not otherwise known to police.

The accused asserted that in obtaining this information, without a warrant, the police had violated his Charter rights.

On the voir dire the accused did not object to the admissibility of surveillance videos obtained by the police showing someone, who was alleged to have been, him on the street. The objection was to the Crown’s use of a photograph of him, associated with his name and age, that they obtained from the Studio Nightclub. Defence counsel submitted that the police should have obtained judicial authorization (a search warrant) before requesting that the nightclub turn over its BarWatch records from the night in question.

The issue before the Court was this: did the accused have a privacy interest in his BarWatch records sufficient to attract protection from s.8 of the Charter?

To claim s.8 protection a claimant must first establish a “reasonable expectation of privacy” in the subject matter. The person must demonstrate they subjectively expected the information would remain private, and that this expectation was objectively reasonable in all the circumstances.

The Crown’s position was that the information obtained by police from the participating BarWatch establishment consisted solely of a name and a photograph of a person who attended a publicly accessible nightclub, and that no further inferences about the accused person’s lifestyle or choices could be drawn from that information standing alone. Crown submitted that individuals routinely given their names to a wide variety of people and businesses for countless reasons and that this does not always engage a reasonable expectation of privacy.

The Court observed that this informational transaction must be viewed in the context of the other information gathered at or around the same time. Here, in addition to the photograph of the accused, the police had surveillance footage taken on the street. When the photographic information is paired with surveillance footage, the police had a reasonably complete picture of the accused person’s movements and whereabouts for approximately two hours.

Thus, the information must be seen not only as a name, but a name, connected with a photo, which can then be tied to otherwise anonymous video surveillance of the street. It is this combination that gives the BarWatch information particular significance.

A person’s name is clearly personal information in which a person has an interest, although it is routinely disclosed without hesitation in a variety of social and commercial interactions. In most situations, there is always the option of not disclosing it, even if that means choosing not to proceed with a particular transaction.

When patrons enter a nightclub and are processed through BarWatch, or some similar program, the Court observed that to the extent patrons give the matter any thought at all, there would likely be a wide variety of subjective expectations and understandings of the process. Some might see the identification procedure as part of a private transaction for the limited purpose of verifying they are of legal drinking age or that they had not previously been barred from the establishment. Others would see it as part of a bona fide safety and security system and understand that the database may be used in the investigation of an incident on the premises should one occur.

The Court observed that there was no evidence of posted signage in the nightclub informing customers about how the information collected by BarWatch could be used.

Ultimately the Court concluded that the police had violated the accused’s Charter rights by obtaining the BarWatch data without first obtaining a warrant, although Justice N. Smith commented that this case was close to the “line.” The Court found that there existed a reasonable expectation of privacy in the BarWatch information and that the police in obtaining the same were conducting a search that should have been the subject of prior judicial authorization.

Conclusion

Although R. v. Roudiani was a criminal decision, for bar and nightclub operators Justice N. Smith’s decision is a welcome and useful clarification on what use BarWatch data, and similar personal information, can be put to by investigators, and the process that ought to be followed when accessing it.

Importantly, this decision like all Charter decisions is fact specific, and Alcohol & Advocacy recommends that all licensees obtain the advice of counsel whenever dealing with issues of privacy, evidence, or police requests.

]]>BC Liquor Law: Serving after hours and drinking on the jobhttp://www.bcliquorlaw.com/bc-liquor-law-serving-after-hours-and-drinking-on-the-job/
Wed, 23 Jan 2019 23:12:34 +0000http://www.bcliquorlaw.com/?p=1143On November 26, 2018 the General Manager of the Liquor and Cannabis Regulation Branch released reasons for the decision in Re Oak & Carriage EH18-041. That decision can be read in full here. The Oak & Carriage is licensed as a liquor primary establishment in Duncan, BC and is operated by a third party. In […]

]]>On November 26, 2018 the General Manager of the Liquor and Cannabis Regulation Branch released reasons for the decision in Re Oak & Carriage EH18-041. That decision can be read in full here. The Oak & Carriage is licensed as a liquor primary establishment in Duncan, BC and is operated by a third party.

In Re Oak & Carriage the Branch alleged that the licensee contravened the Liquor Control and Licensing Act by selling liquor outside the hours of service specified on the licence (being after 1:00 am) and failing to ensure that an employee did not consume alcohol while working.

The Facts

Contravention 1 – Serving after hours

On Saturday April 14, 2018 two liquor inspectors attend the Oak & Carriage around midnight. They sat at a table directly across from the service bar. They did not identify themselves as liquor inspectors.

At approximately 1:09 am the liquor inspectors observed a female bartender pour “an amber coloured liquid” from a pitcher located behind the bar into the glass of a patron who was seated at the bar. Liquor inspector 1 believed the pitcher may have been a “foam” or “overflow” pitcher used to catch excess beer, and that the bartender was now giving it away at the end of the night.

Significantly, the liquor inspectors did not have any evidence of when or if the pitcher had been purchased by a patron or patrons. Liquor inspector 1 conceded under cross-examination that if the pitcher had been purchased before 1:00, it would not “typically” be treated as a contravention for a staff member to pour it for a customer provided that occurred within 30 minutes of last call. The liquor inspector stressed that a pitcher of beer must be sold to more than one customer, but again did not have any evidence of whether or not such a sale had occurred.

The licensee’s evidence, provided by the manager Mr. Morrisson, was that his establishment does not maintain a foam or overflow bucket, and that this is an old practice no longer followed in most establishments. He went on to say that his establishment is also not in the habit of keeping “random jugs of beer” and offering them for free to customers.

Mr. Morrison’s explanation for a pitcher of beer being kept by staff on or behind the service bar was that it was common for barstaff to watch a customer’s drink, when requested, if they stepped out for a smoke or went to the washroom.

Contravention 2 – Consuming alcohol while working

The Branch’s second allegation related to the liquor inspectors’ observation that a bartender took a bottle of Black Cellar wine from behind the bar and pour it into a mug that Mr. Morrison was drinking from while working. Although there was some collateral evidence of Mr. Morrison exhibiting signs of intoxication that evening, the primary thrust of the Branch’s case rested on this single observation.

Mr. Morrison agreed that he was working on the evening in question, and that after midnight he transitions to “socialization mode” whereby he focuses on customer interactions, and less on the routine tasks involved in managing the establishment. During this time he drinks de-alcoholized wine, which is stocked by the Oak & Carriage and is featured on its menu. His evidence was that if he is going to drink something to be social, he’d rather drink de-alcoholized wine than fruit juice. Put simply, he admitted to drinking wine – but not wine that meets the definition of “liquor” under the Act.

For their part the liquor inspectors testified to seeing a bartender reach for Black Cellar wine from behind the bar, which does not come in a de-alcoholized version, and pour some into Mr. Morrison’s mug. However the liquor inspector’s line of sight at the point the wine was poured into a glass or mug was at least partially obscured by a patron and a backpack. Given the close proximity of another customer, and the presence of other customers in the establishment, it was possible that the Black Cellar wine was poured into a glass destined for a paying customer.

Conclusion

The Branch found neither of the contraventions alleged to have been proven on a balance of probabilities and the notice of enforcement action was dismissed. In sum the evidence of the liquor inspectors was less than compelling.

As a footnote, the General Manager’s Delegate Ms. Poole found Mr. Morrison’s testimony about what he was drinking on the night in question, being de-alcoholized wine,“persuasive.” Mr. Morrison described himself as a “sommelier and a wine connoisseur” and further that if he was going to drink alcohol wine it would not be Black Cellar which he described as “cheap plonk.” Evidently Mr. Morrison does not mince his words.

Re Oak & Carriage is another recent example of licensees successfully challenging notices of enforcement action where the evidence gathered and presented by the Branch and its inspectors simply did not support the contravention alleged. While the outcome here was positive for the licensee, and it was afforded the benefit of the doubt, licensees should keep in mind that this is not always the case.

If your establishment has been served with a contravention notice, or a notice of enforcement action, contact Dan Coles at Owen Bird.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

]]>BC Liquor Enforcement: Even police officers can be bad witnesseshttp://www.bcliquorlaw.com/bc-liquor-enforcement-even-police-officers-can-be-bad-witnesses/
Thu, 03 Jan 2019 22:08:46 +0000http://www.bcliquorlaw.com/?p=1134When you or your establishment has been served with a Notice of Enforcement Action, it can feel like the full weight of British Columbia’s Liquor Control and Licensing regime, and its endless resources, are bearing down on you. Exacerbating matters, you may learn that police officers will be giving evidence for the prosecution. Despite your […]

]]>When you or your establishment has been served with a Notice of Enforcement Action, it can feel like the full weight of British Columbia’s Liquor Control and Licensing regime, and its endless resources, are bearing down on you. Exacerbating matters, you may learn that police officers will be giving evidence for the prosecution. Despite your convictions, and your firm belief that the contravention alleged by the Branch did not occur, you may be tempted to sign a waiver notice – just to get the unpleasant process behind you. Resist this urge!

As the recent decision of the General Manager of the (then) Liquor Control and Licensing Branch in Re Days Inn, EH18-006 exemplifies, liquor inspectors and police officers do not always make good witnesses. Sometimes their evidence can be inconsistent and incomplete, forcing the Delegate hearing the matter to favour the evidence of the licensee and conclude that the alleged contravention has not been established. The decision in Re Days Inn can be read in full here.

Facts

On December 4, 2017 two on-duty RCMP officers sat in their patrol car near a Licensee Retail Store, the Days Inn (Inn of the West) in Terrace, BC.

“Officer 2” (as he is identified in the Branch’s reasons) observed a male cross the intersection and enter the LRS. Both officers then exited the police vehicle and observed the customer, through the LRS windows, purchase a 15 pack of Wildcat beer. When the customer exited the store, the police spoke with the customer and observed a high degree of intoxication.The officers concluded that the customer was intoxicated.

“Officer 1” subsequently entered the LRS, spoke with the clerk who sold the customer the beer, and asked that she refund the purchase. The clerk did, and the customer was allowed to continue home on his own accord. The clerk advised police she thought the customer merely had something wrong with his leg, and was not staggering from alcohol consumption.

Officer 2 wrote his report immediately after the incident. Officer 1 did not produce a written report of the incident until the following day. The local liquor inspector learned of the incident from Officer 1 at a hockey game later that same day. The liquor inspector attended the LRS on December 8 (four days after the incident) to speak with the LRS supervisor. On December 11 the liquor inspector, having now received the RCMP reports interviewed the LRS clerk, and issued a contravention notice to the licensee for selling liquor to an intoxicated person.

Analysis

At first blush the facts in Re Days Inn are not particularly remarkable: the LRS employee denied selling alcohol to an intoxicated person, two police officers filed reports saying otherwise. However, upon closer examination, the Branch’s case against the licensee was plagued by the police officer’s poor note taking, contradictory evidence at the hearing, and tainted by the liquor inspector’s request that Officer 1 provide a supplemental report on December 27th.

The evidence of the police was as follows:

Officer 1’s report, written the day after the incident, confirms observing a male known to police walking in a “staggering manner”. His first report also mentioned that the customer was in the presence of his sober brother.

Officer 2’s evidence was that the customer was intoxicated and set out particulars of that intoxication in his report. However his evidence at the hearing was that the customer was alone (and not with his brother).

Officer 1, at the request of the liquor inspector, authored a subsequent report on December 27th that included additional observations of the customer’s “physical symptomology” made by him through the LRS’s window while the customer was inside. The subsequent report contained additional information about glossy eyes, slurred speech and odour of liquor. Officer 1 was of the view that the customer was extremely intoxicated.

In dismissing the contravention, the General Manager’s Delegate Nerys Poole set out her concerns with the Branch’s evidence as follows:

Officer 1’s first report did not mention any of the constellation of symptoms that Officer 2’s report contained about odour of liquor, heavily slurred speech and glassy eyes. Those details only appeared in Officer 1’s second report made three weeks later, and at the request of the liquor inspector.

The Branch led inconsistent evidence about the “normal gait” of the customer. The liquor inspect testified he had known the customer for 18 years and that he always walks with a “shuffle.” The police officers testified to also being familiar with the customer, but that he had a perfectly normal gait when sober. This conflicting evidence from the Branch witnesses left the Delegate with doubt as to how the customer normally walks, and whether or not his gait could be evidence of his intoxication.

Other points of conflict in the police officer’s evidence was whether or not the customer was alone, or with his brother, and whether or not he was “extremely intoxicated” or merely intoxicated simpliciter. Officers 1 and 2 gave differing evidence on each point.

While each of inconsistencies outlined above may not individually have been sufficient to undermine the Branch’s case against the LRS, the totality of the contradictions in the Branch’s evidence caused concern for Delegate Poole. When contrasted with the compelling evidence of the LRS store clerk on her training, and established practice of not serving intoxicated individuals, the General Manager’s Delegate had little choice but to dismiss the contravention allegations.

Liquor Control and Licensing Act contraventions related to intoxication turn significantly on the observations made by liquor inspectors, police officers, and sometimes other witnesses. When the reliability of those observations are in doubt, as they were in Re Days Inn, it is difficult for the General Manager’s Delegate to be satisfied that a contravention in fact occurred.

Conclusion

Re Days Inn is an important reminder to licensees to be cautious before signing a waiver notice – resist the urge to “plead guilty” before all the facts are known, and the Branch has made proper and fulsome disclosure of the case against you.

Being served with a Contravention Notice or Notice of Enforcement Action can be intimating especially when the police have been involved. Retaining counsel familiar with British Columbia’s liquor laws and the enforcement process can go a long way to ensuring your business makes an informed decision about signing a waiver notice, or proceeding to a hearing. If you have questions about this process please contact Dan Coles at Owen Bird.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

]]>Alberta announces changes to “modernize” liquor lawshttp://www.bcliquorlaw.com/alberta-announces-changes-to-modernize-liquor-laws/
Fri, 16 Nov 2018 21:22:51 +0000http://www.bcliquorlaw.com/?p=1129On October 22, 2018 the Alberta Gaming and Liquor Commission announced that “effective immediately” bars and restaurants are allowed to mix liquor products with ingredients such as spices, herbs and fruits as well as create house-aged liquor products. Additional changes will allow Albertans to take liquor served at a hotel bar to their rooms or other […]

]]>On October 22, 2018 the Alberta Gaming and Liquor Commission announced that “effective immediately” bars and restaurants are allowed to mix liquor products with ingredients such as spices, herbs and fruits as well as create house-aged liquor products. Additional changes will allow Albertans to take liquor served at a hotel bar to their rooms or other areas within the hotel.

British Columbia’s liquor laws have permitted these practices since January, 2017.

Other key changes include:

Ferment-on-Premises: Albertans are able to make their own beer or wine at licensed facilities and then take it home.

Seniors lodges: Facility owners and operators can authorize residents to consume their own supply of liquor within other rooms and common areas.

Theatregoers: As the final curtain drops, guests and performers can enjoy liquor products past the final curtain within the licensed areas of the venue, should the licensee wish to provide the opportunity.

]]>Decision under appeal: Unfiltered Brewing Incorporated v. Nova Scotia Liquor Corporationhttp://www.bcliquorlaw.com/decision-under-appeal-unfiltered-brewing-incorporated-v-nova-scotia-liquor-corporation/
Tue, 13 Nov 2018 16:58:18 +0000http://www.bcliquorlaw.com/?p=1116In January of this year the Supreme Court of Nova Scotia issued its decision in the matter of Unfiltered Brewing Inc. v. Nova Scotia Liquor Corporation. That decision can be read in full here. You can also find a summary of that decision over at Slaw.ca. Unfiltered Brewing sought an appeal of the decision, and […]

]]>In January of this year the Supreme Court of Nova Scotia issued its decision in the matter of Unfiltered Brewing Inc. v. Nova Scotia Liquor Corporation. That decision can be read in full here. You can also find a summary of that decision over at Slaw.ca.

Unfiltered Brewing sought an appeal of the decision, and on November 15, 2018 the Nova Scotia Court of Appeal will hear oral arguments on the appeal. If you are in Halifax, and a supporter of craft beer, you should pay courtroom 502 a visit.

The issue in Unfiltered Brewing, like so much of the liquor law litigation happening in Canada these days, was constitutional in nature: does the Nova Scotia Liquor Corporation have the jurisdiction to charge a mandatory retail mark-up on beer sold (or even given away) by Unfiltered Brewing, at its premises on North Street in Halifax? Unfiltered Brewing argued, unsuccessfully, that it does not. It asserted that Nova Scotia’s liquor mark-up regime on beer not sold or handled by the NSLC was in pith and substance a tax that the NSLC was not authorized to implement. The NSLC satisfied the court that the mark-up was not a tax but rather a proprietary charge within the authority of the NSLC to collect pursuant to its statutory mandate.

The court noted that the Toronto Distillery Co. recently, and also unsuccessfully, advanced similar arguments in its case against the Liquor Control Board of Ontario. A summary of that decision can be read here.

Alcohol & Advocacy expects the Nova Scotia Court of Appeal to follow the Ontario Court of Appeal’s decision in Toronto Distillery Co. A summary of that decision can be read here. However, if the Nova Scotia Court of Appeal overturns the lower court’s decision, such a ruling could have national implications. A&A will be watching closely.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

]]>Liquor Control and Licensing Branch clarifies “ID Checking Misconceptions”http://www.bcliquorlaw.com/liquor-control-and-licensing-branch-clarifies-id-checking-misconceptions/
Fri, 20 Jul 2018 22:49:41 +0000http://www.bcliquorlaw.com/?p=1111In the Spring 2018 edition of Liquor Line, the Liquor Control and Licensing Branch’s biannual newsletter, the LCLB affirmed the basic principle that licensees are responsible for making sure their staff do not provide liquor to minors, but also clarified situations where it is “ok” for staff not to check ID. The Branch clarified that staff […]

]]>In the Spring 2018 edition of Liquor Line, the Liquor Control and Licensing Branch’s biannual newsletter, the LCLB affirmed the basic principle that licensees are responsible for making sure their staff do not provide liquor to minors, but also clarified situations where it is “ok” for staff not to check ID.

The Branch clarified that staff members observed not asking a youthful looking person for ID is not itself a contravention of the Liquor Control and Licensing Act, or the terms and conditions of a licence – it is the act of selling or serving liquor to a minor that is a contravention. The Branch provided the following examples to clarify the point:

If your staff member happens to know that a youthful looking person is 19 years of age or older, and a liquor inspector observes them not asking that person for ID, that is not a contravention provided that the patron can satisfying the inspector they are 19 or older;

Staff are permitted to refuse service when they believe an individual is a minor, even if they don’t ask that person for ID.

The Branch stressed that where there is any doubt, requesting two pieces of ID remains the best practice.

For licensees, providing ongoing training for staff on the basics of asking for and inspecting identification is of paramount importance. Not only is it the responsible thing to do, but a meaningful and thorough staff training regimen with ongoing reinforcement of the Serving It Right curriculum goes a long way towards mounting a successful defence of contravention enforcement action.

Despite the LCLB’s ongoing efforts to educate licencees on the importance of preventing the sale and service of alcohol to minors, contraventions for the same remain the leading cause of enforcement action against licensees. The penalty for a first contravention of serving a minor is a 10 day licence suspension or a $7,500 fine.

If your establishment has been served with a contravention notice, or is facing enforcement action, contact Dan Coles at Owen Bird for assistance.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

]]>Hughes v. Liquor Control Board of Ontario: 2000 Beer Framework Agreementhttp://www.bcliquorlaw.com/hughes-v-liquor-control-board-of-ontario-2000-beer-framework-agreement/
Sun, 03 Jun 2018 18:18:34 +0000http://www.bcliquorlaw.com/?p=1075The trend of Canadian consumers and licensees challenging how provincial governments regulate, tax, and sell alcohol is alive and well in 2018. The anticipation in advance of the Supreme Court of Canada’s decision in R. v. Comeau, and the widespread media attention following its release, speaks for itself. From coast-to-coast Canadians are dissatisfied with the […]

]]>The trend of Canadian consumers and licensees challenging how provincial governments regulate, tax, and sell alcohol is alive and well in 2018. The anticipation in advance of the Supreme Court of Canada’s decision in R. v. Comeau, and the widespread media attention following its release, speaks for itself. From coast-to-coast Canadians are dissatisfied with the regimes in place in their respective provinces that tax and restrict the sale of alcohol. The ink spilled over Comeau tells us something else too: very few Canadians actually understand how the liquor licensing and retail regimes in their respective provinces operate.

Fortunately, for readers of Alcohol & Advocacy in Ontario, the recent Superior Court of Ontario decision in Hughes v. Liquor Control Board of Ontario et al, goes a long way to explaining the beer warehousing and retailing environment in Ontario. In doing so the Court dispelled certain widely held myths about the much maligned Beer Store. Hughes is a lengthy (286 paragraphs) decision that provides an unusually detailed account of the business side of the government retail of beer in Ontario. It can be read in full here.

The Hughes decision predates the Comeau decision by about a month but is consistent with the latter. In passing, the Court confirmed that “the provinces have the jurisdiction to regulate and control the sale of liquor within their boundaries and to fix the prices at which, and the conditions under which, liquor may be sold.”

The Complaint

Mr. Hughes and his restaurant The Poacher, both of beautiful Burlington, Ontario, have now joined good (but also unsuccessful) company in challenging provincial alcohol regulation. Recently the now defunct Toronto Distillery Co., and Halifax’s Unfiltered Brewing made similar court challenges over what they perceived to be unfair treatment by their respective provincial regulators.

Mr. Hughes in his proposed class action was seeking over $1 billion in damages for various breaches of the Competition Act, civil conspiracy, unjust enrichment, breach of the Liquor Control Act, as well as the freshly-invented tort of “Misconduct by a Civil Authority.”

Needless to say Mr. Hughes’ lawsuit was broad in scope. While legally the proceedings were somewhat complex, for the purposes of this article the thesis was straightforward: Mr. Hughes alleged that the large breweries that own the Beer Store (Labatt, Molson, Sleeman) entered into a clandestine arrangement known as the 2000 Beer Framework with the government of Ontario which permitted the Beer Store to sell beer to licensees at an inflated price and would limit ordinary government liquor stores’ ability to sell beer in quantities greater than a six pack.

Mr. Justice Paul Perell, using colourful language at times, dismissed the action in its entirety.

The genesis of the lawsuit appears to have been a December, 2014 article published by the Toronto Star that purported to have uncovered the 2000 Beer Framework Agreement. The article, rather dramatically (and incorrectly), described the Agreement as a “secret deal” between the LCBO and Brewers Retail, an “inglorious cash grab”, and a “protectionist pact” that gouged both beer drinkers and the food and beverage industry. Three days later Mr. Hughes commenced his lawsuit.

To place Mr. Hughes’ allegations in context, the court summarized the history of Ontario’s beer market in some detail.

The History of Ontario’s Beer Market

Since 1927, when Prohibition was repealed in Ontario, the distribution and sale of alcoholic beverages has been intensely regulated and supervised by the provincial government through the LCBO.

The LCBO has never been free to carry on business as if it were a private, profit-maximizing commercial enterprise free of government influence. Rather, the government exercises considerable control over the LCBO and requires it to exercise its powers and to carry on business in a way to implement government polices within the parameters set out by the Liqour Control Act and related legislation.

Retail Stores

Under the Liquor Control Act the LCBO is empowered to establish “government stores” for the sale of liquor to the public, and to fix or approve the prices for the goods (being alcohol) sold at these stores.

Around the time that the LCBO was established, the Ontario Government negotiated with the Ontario brewing industry to set up a single distribution-retail system for beer manufactured in Ontario by licensed manufacturers, and Brewers Retail (which prior to 1988 was known as Brewers’ Warehousing Company, Limited) a collective of Ontario brewers, was created for that purpose. Brewers Retail, which carries on business as a government store known as the “Beer Store” operates on a break-even basis and is not an independent profit centre for its shareholders. These are important details in the narrative – the Beer Store is not a recent innovation. For better or worse it’s been a fundamental component of beer distribution and retail in Ontario for almost a century.

Labatt, Molson, and Sleeman are brewers; i.e. beer manufacturers in Ontario. Labatt is a Canadian corporation and a subsidiary of Anheuser-Busch InBev, a Belgium corporation. Molson is a Canadian corporation that is a subsidiary of Molson Coors Brewery Corp., a U.S. corporation. Sleeman is a Canadian corporation. It is a subsidiary of Sapporo Canada Inc., a Canadian corporation, which is a subsidiary of Sapporo International Inc., a Japanese corporation.

Labatt, Molson, and Sleeman are the largest shareholders of Brewers Retail. At the time of the 2000 Beer Framework Agreement Labatt (45%), Molson (45%), and Sleeman (10%) were the only shareholders of Brewers Retail. (More recently the group of shareholders has expanded to add numerous other brewers.)

Save for the beer sold at the LCBO’s “ordinary”, “combination”, and “agency” stores, Brewers Retail is the distributor, wholesaler, and retailer of beer in Ontario. Brewers Retail is also Ontario’s primary container return service (recycling). Since 1927, Brewers Retail has levied and refunded deposits on all empty beer containers purchased in Ontario. In 2007, that service expanded, and Brewers Retail now accepts returns of all alcoholic beverage containers purchased in Ontario.

Brewers Retail was established for the specific purpose of providing Ontario with an efficient and cost-effective channel through which large volumes and packages of beer could be distributed and sold across the province. Ontario made a deliberate decision to focus the business of the LCBO on wine and spirits. Accordingly, the LCBO did not develop the infrastructure necessary to warehouse, distribute and sell beer on a scale necessary to service Ontario’s retail and licensee consumers.

Brewers Retail’s role in Ontario’s beer distribution system is expressly recognized in the Liquor Control Act. The Act provides the LCBO with the power to authorize Brewers Retail to operate stores for the sale of beer to the public, but importantly the LCBO retains the authority to control how the beer is sold, establish specific terms and conditions relating to Brewers Retail’s operation of its stores and determine in what municipalities Brewers Retail may operate these stores. Thus there is an inherent tension between the LCBO and the Beer Store: in some contexts the entities are partners, in other situations competitors, while paradoxically the LCBO remains ultimately in control.

Beer is a low margin product that must be sold in significant volumes to be profitable. Brewers Retail’s stores are configured to accommodate high-volume beer sales. Brewers Retail’s stores had, until relatively recently, far greater storage space and refrigeration than LCBO outlets.

The Uniform Price Rule

Historically, beer was priced in Ontario pursuant to the “Uniform Price Rule” which was a manifestation of government policy that alcohol prices should be uniform across the width and breadth of Ontario. Put simply, consumers in the more remote parts of the province should pay the same for alcohol as consumers in the southern more populated parts of the Province (despite the difference in storage, transporation and retailing costs).

Subject to the Uniform Price Rule, the pricing of beer in government stores, whether operated by the LCBO or by Brewers Retail, is governed by regulations promulgated under the Liquor Control Act. The Rule provides that it is the brewer that sets the price of its product, and the LCBO’s role has been to verify that the prices proposed by brewers are above the stipulated minimum prices applicable to particular classes of beer. Brewers Retail does not set the price, and it has no control over the prices at which individual brewers sell their products at the Brewers Retail stores.

There are two distribution channels for beer; i.e., a distribution channel for retail consumers and a distribution channel for licensees. Historically, the pricing for product for retail consumers and licensees has been different because licensees can resell at significant mark-up and licensees have access to draught beer, which provides a less expensive option for high volume sales. Thus, some brewers may charge higher prices in the licensee distribution channel than for the same product in the retail consumer distribution channel. Other brewers may set prices for licensees that are lower than for retail consumers. In either case, it is the brewer not the LCBO or Brewers Retail that determines the price for the product. Thus, brewers like Labatt, Molson, and Sleeman, typically propose two prices to the LCBO for beer: one price that is charged to members of the general public, and another (typically higher) price that is charged to licencees who purchase beer for resale to their patrons.

Differential pricing between licensees and retail consumers in Ontario is not unique to beer products. The price at which wine and spirits are sold to licencees by the LCBO is typically different from the price for consumers.

Returning to the topic of the Uniform Price Rule, since the repeal of Prohibition, it has been Government of Ontario policy to prohibit price competition between the LCBO and Brewers Retail in the retail sale of beer. Since 1972, the Liquor Control Act has required that the price of beer be subject to the Uniform Price Rule and that the retail price of a particular class, variety and brand of beer be fixed and uniform across all retail stores throughout the province. This Uniform Price Rule applies regardless of whether the store in question is owned or operated by the LCBO or by Brewers Retail. The Rule has also been interpreted so that it applies separately to retail sales and sales to licensees. In other words, a beer product to be sold to consumers is priced pursuant to the Rule and then the product is sold at that price across the province. A beer product to be sold to licensees, even the same product, is separately priced pursuant to the Rule and then the product is sold at that price to licensees across the province. This differential pricing is the nub of the Plaintiffs’ unjust enrichment case.

Up until the early 1990’s, the LCBO sold almost exclusively wine, spirits and imported beer. It’s business in the domestic beer trade was negligible – approximately 95% of all domestic beer sold in Ontario was sold through Brewers Retail.

Over the years, the LCBO and Brewers Retail came to an arrangement or understanding about the distribution and sale of beer in Ontario. The distribution scheme, which the defendants in Hughes submitted was in accordance with the Liquor Control Act, and had been followed for decades was as follows:

In communities where Brewers Retail operated, the LCBO would operate ordinary stores and only sell beer in package sizes of 6 units or less, and Brewers Retail would sell beer in all formats including the larger popular formats such as 12- and 24-pack formats.

In smaller communities where there were no Brewers Retail stores, the LCBO would operate as a combination store and would sell beer in larger package sizes, including 12- and 24-package sizes.

If a community with a combination store grew to be of sufficient size to make a Brewers Retail store viable, Brewers Retail would have the opportunity to build a store, in which case, the LCBO’s combination store would revert to an ordinary store.

The LCBO did not sell to licensees any beer sold by Brewers Retail.

The LCBO would take first receipt of all foreign beer imported into the province and would sell it to Brewers Retail for sale and distribution to licensees.

The LCBO would only sell to licensees the beer brands that had not been purchased by Brewers Retail for distribution to licensees.

In 1984, at the request of the Government of Ontario, Brewers Retail’s distribution and retail system became available to all brewers in Ontario on a fee for service basis. This change was made to accommodate the needs of a new wave of small Ontario brewers. The new brewers could not afford or did not want to become part owners of Brewers Retail, but they needed a means of distributing their product.

Under the Intergovernmental Agreement on Beer Marketing Practices, effective January 1, 1991, the Government of Canada and the governments of all Canadian provinces undertook to eliminate any policies, practices, laws or regulations that discriminated against the sale of Canadian beer and beer products based on their province of origin. As a result, the Government of Ontario directed that the LCBO eliminate any discriminatory practices and amended a regulation under the Liquor Control Act to allow the sale through Brewers Retail of beer made in other Canadian provinces.

The March Towards the 2000 Beer Framework Agreement

In the mid-1990’s, there were discussions in the media and by provincial government representatives about the potential privatization of the LCBO and a fundamental reorganization of the liquor and beer retail system in Ontario. The possibility of eliminating the Brewers Retail system was discussed.

Privatization was ultimately not pursued, but the LCBO was encouraged to pursue an expansion of its retail operations and to invest in modernizing its stores. The LCBO responded to the Government’s directives by expanding its retail system, including adding new stores.

This initiative was the cause of some tension, as the LCBO had the regulatory power to approve or deny Brewers Retail’s requests to open new stores in combination store communities that had grown large enough to support a free-standing Beer Store.

In 1995, Brewers Retail applied to the LCBO for permission to open or re-open stores in ten communities that were then being serviced by LCBO combination stores. This was problematic for the LCBO, which had made substantial investments in the stores. With the concurrence of then-Minister of Consumer and Commercial Relations, the LCBO refused all of Brewers Retail’s applications.

Unsurprisingly, Brewers Retail and its shareholders were unhappy with the LCBO’s decisions. The result of these decisions was that Brewers Retail suffered a significant loss in market share and in the volume of its beer sales. It made numerous complaints to the Premier, Cabinet Ministers, and to MPPs representing the communities concerned. The dispute between the LCBO and the private sector brewers became increasingly contentious and increasingly public.

Throughout this period, beginning in or around early 1996, Brewers Retail elected to defer further investments in modernizing it stores because of concerns about potential privatization of the LCBO and about the LCBO’s expansion of its role beyond its traditional focus on spirits and wine. Brewers Retail believed that the expansion of the LCBO threatened the viability of its distribution system and that it could not justify committing the capital for modernization and expansion without have some measure of predictability of expected beer volume and stability in its role as the primary distributor and retailer of beer in Ontario. Brewers Retail wanted a commitment from the Ontario Government that its mandate to operate Ontario’s beer retail system would continue.

It was understood that a resolution would encourage increased investment in the distribution system.

On June 1, 2000 (after years of negotiation), the LCBO and Brewers Retail entered into the 2000 Beer FrameworkAgreement, under this agreement Mr. Hughes alleged that the parties unfairly re-allocated the Ontario retail beer market between themselves. Justice Perell found otherwise, concluding that the 2000 Beer Framework Agreement did not change the different pricing models of the LCBO and Brewers Retail for the sale of beer to licensees. The court concluded:

There was no evidence that a purpose of the 2000 Beer Framework Agreement was to increase beer prices, and there was no evidence that the price of beer was discussed by the parties to the agreement

There was no evidence that the agreement was in any way “secretive”. To the contrary, it was delivered to government officials including the Minister and Deputy Minister of Consumer and Commercial Relations, the Small Brewers Association, the Ontario Public Service Employees, and Restaurants Canada among other entities, including licensees

The 2000 Beer Framework Agreement did not change much in the way that the LCBO and Brewers Retail each operated. The status quo prevailed. Both before and after the Agreement was adopted, government policy precluded the LCBO from selling 12-packs and 24-packs at ordinary stores and precluded the LCBO from selling to licencees the beer that was exclusively distributed by Brewers Retail. The LCBO would have needed the provincial government’s approval to change this status quo, and the government refused to grant any such approval

A New Framework

In September 2015, Brewers Retail, its shareholders, and the Government of Ontario entered into a new agreement. Effective January 1, 2016, the 2016 Beer Framework Agreement replaced the 2000 Beer Framework Agreement, which was terminated.

The 2016 Beer Framework Agreement mandated changes to Brewers Retail’s ownership structure, corporate governance, retail and marketing practices, and customer retail experience. There are now over 30 shareholders. The 2016 Beer Framework Agreement continued the existing policy, formalized in the 2000 Beer Framework Agreement, of the LCBO not selling beer in its non-combination stores in formats larger than a 6-pack, subject to a new pilot program through which 12-packs are sold by the LCBO in a select number of non-combination Stores.

]]>Brew Street Craft and Kitchen: Permitting an intoxicated person to remainhttp://www.bcliquorlaw.com/brew-street-craft-kitchen-permitting-intoxicated-person-remain/
Mon, 19 Mar 2018 19:17:23 +0000http://www.bcliquorlaw.com/?p=1065St. Patrick’s Day is a big source of business for the liquor industry. While all owners and managers hope that the day will run smoothly, and profitably, the failure by staff to comply with the terms of the Liquor Control and Licensing Act, namely by over-service, can put a damper on the festivities. Regrettably, the […]

]]>St. Patrick’s Day is a big source of business for the liquor industry. While all owners and managers hope that the day will run smoothly, and profitably, the failure by staff to comply with the terms of the Liquor Control and Licensing Act, namely by over-service, can put a damper on the festivities. Regrettably, the Brew Street Craft and Kitchen learned this the hard way last year.

The Brew Street Craft and Kitchen is a liquor primary establishment located on St. John’s Street in Port Moody, not far from Brewer’s Row. Brew Street Craft and Kitchen operates under a liquor primary licence, has over 100 beers on tap, and boasts an offering of fresh, local and innovative food.

On St. Patrick’s Day in 2017, Brew Street Craft and Kitchen was the target of a covert inspection conducted by liquor inspectors and Port Moody police officers. The inspectors observed three patrons behaving in a manner that indicated they were intoxicated, but did not observe any staff members taking actions to remove them from the premises. Ultimately uniformed police officers removed one of the patrons. Permitting an intoxicated person to remain in a licensed establishment is contrary to section 61(2)(b)(ii) of the Liquor Control and Licensing Act.

A delegate of the General Manager of the Liquor Control and Licensing Branch conducted a hearing into the alleged contravention over two days in December, 2017 and on January 18, 2018 the Branch confirmed the contravention and ordered that the Brew Street Craft and Kitchen’s licence suspended for a period of six days. The decision can be read in full here.

FACTS

As Alcohol & Advocacy has written previously, British Columbia’s Liquor Control and Licensing Branch targets its investigations at licensees who are the subject of complaints or have had a history of compliance problems. In March of 2017, local liquor inspectors and police were of the view that the Brew Street Craft and Kitchen was receiving a disproportionate number of complaints related to noise, intoxicated customers, and other anti-social behaviour. On the basis of this information, at approximately 7:50 p.m. on March 17, 2017 two plain-clothed police officers from the Port Moody police department, accompanied by two undercover liquor inspectors, entered the establishment and remained there until approximately midnight. Over the next four hours the liquor inspectors and police officers took notes of their observations and communicated the same to a liquor inspector and two uniformed police officers who entered the premises at approximately 11:20 p.m.

The undercover officers observed three patrons that were displaying signs of significant intoxication, but for which staff members took no action to remedy. One plainclothes police officer observed a male purchasing shooters at the bar who was slurring his words and swaying side to side, he shouted “I’m drunk!” several times and even staggered into the police officer.

A liquor inspector noticed a middle-aged man in the washroom who, while attempting to exit a washroom stall, fell backwards into the door. A third patron, a female, was observed by a police officer to have “difficulty controlling her emotions”, and after taking two shots of Crown Royal within fifteen seconds of each other, had difficulty entering the PIN number on her credit card to pay for the same.

Despite the foregoing, the police officer who gave testimony at the hearing confirmed that the majority of the patrons were well behaved, the establishment appeared to be professionally run, and that although it was St. Patrick’s Day it was not a “chaotic situation”. However, the officer went on to say that given the overall behaviour of those in the establishment, in his view the intoxicated individuals identified above should have stood out in this crowd and staff should have responded promptly to the situation.

LICENSEE’S EVIDENCE

Brew Street Craft and Kitchen was not represented by counsel at the hearing, and unfortunately its witnesses were not prepared and did not present well.

Both the bar manager and assistant bar manager of the Brew Street Craft and Kitchen testified. At the outset of her reasons, the General Manager’s Delegate conducting of the hearing, Ms. Poole, questioned whether the titles these witnesses purported to hold were accurate, as the bar manager appeared to have considerably less experience than the assistant bar manager and had worked in the establishment for a shorter period of time. Also, the assistant bar manager initially identified himself as one of the “head managers”.

Exacerbating matters, neither of the managers could remember much about the evening of March 17, 2017. Put simply, despite having uniformed police officers in the establishment who were required to escort an intoxicated patron off the premises, neither manager completed an incident report sheet or took contemporaneous notes documenting the evening. Without notes to refresh their memory, the evidence of the managers at the hearing was severely limited. The licensee, represented by the owner Mr. David James, attempted to lead evidence in support of a due diligence defence. This consisted, in part, by tendering examples of the bar’s policy and procedure forms, as well as descriptions of the establishment’s pre-shift meetings and other staff and management meetings conducted from time-to-time.

Unfortunately for the licensee, the General Manager’s Delegate did not find the bar’s policies and procedures to be satisfactory. On cross-examination it was apparent that neither of the bar’s managers were intimately familiar with the aforementioned policy and procedure documents, nor did they require strict compliance with the same from their staff. On the issue of pre-shift meetings, considered to be a best practice in the industry, the managers did not record what was discussed at these meetings and could not recall if there had been a pre-shift meeting for the St. Patrick’s Day evening of March 17, 2017.

Though the Branch did consider that the Brew Street Craft and Kitchen had retained a liquor consulting firm to assist with policy, and that there had been some post-contravention changes at the establishment, at the time of the contravention adequate training and other systems to prevent the contravention of allowing an intoxicated person to remain had not been implemented.

Ultimately the Branch accepted the liquor inspector’s recommendation that the appropriate penalty for the contravention should be at the higher end of the range, given the severity of the intoxication of the patrons identified, the number of patrons who were identified, and the fact that staff were not taking any action despite the obvious signs of intoxication. The Branch determined a six-day licence suspension was reasonable and appropriate for the circumstances.

CONCLUSION

The reasons in Re Brew Street Craft and Kitchen offer a litany of teachable points for licensees – from the night of the contravention to preparing for the hearing itself. Notes were not made, bartenders and waiters were not interviewed, CCTV footage was not preserved, due diligence type activities were not adequately performed, and witnesses were not prepared.

If your establishment has received a contravention notice, or is facing enforcement action, and you require assistance documenting the allegations or preparing for the hearing, contact Dan Coles at Owen Bird.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.